PSST: Patterns of Sustainable Specialization and Trade
George Mason University
January 28, 2013
Capitalism and Society, Vol. 6, Issue 2, Article 2, 2011
This essay offers an alternative way to look at macroeconomics. The current standard approach uses aggregate supply and aggregate demand (AS-AD). I call the alternative approach patterns of sustainable specialization and trade (PSST). The PSST approach combines many old and new strands in economics. It suggests that the economy is a highly complex system that is constantly adapting to new circumstances, especially opportunities created by technological innovation. We can view employment fluctuations as a reflection of the difficulty that markets sometimes have in making the necessary adjustments, so that for a period of time some workers have extremely low marginal revenue product and as a result become unemployed.
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Number of Pages in PDF File: 20
Date posted: January 28, 2013